AINS 21 Segment A

AINS 21 Segment A | 124 Questions with 100 % correct answers | Verified& Updated 2024 Graded A+ 4 roles of insurance - 1. risk management technique 2. transfer system 3. business 4. contract loss exposure - any condition or situation that presents a possibility of loss, whether or not actual loss occurs risk management - making and implementing decisions that will minimize the adverse effects of accidental losses on an organization -avoid, prevent, reduce -from RM standpoint, insurance is used to transfer cost of losses loss prevention - reduces frequency of loss -ex. wearing safety goggles/helmets loss reduction - reduces severity of loss -ex. fire extinguishers or sprinklers in building insurance as a risk transfer system - 1. transfer cost of losses - exchange possibility of large loss for smaller payments (premium) 2. sharing cost of losses - pooling premiums exposure unit - measure of loss exposure by insurer law of large numbers - as number of similar but independent exposure units increases, the accuracy of predictions about future outcomes also increases PC insurance - one of two main sectors in insurance industry (45%) - cover financial consequences of damage to one's own property or legal liability to others LH insurance - one of two main sectors in insurance industry (55%) - cover financial consequences of death, injury, sickness revenue for insurers - 1. premium 2. investment income expenses for insurers - loss settlement, acquiring new business (advertising and commissions), general (salaries, utilities, computer equipment), premium taxes, licensing and fees, investment (salaries of investment depart